Organizational Change and Culture

Chapter 1Chapter 177

Organizational success depends Organizational success depends

on the organization’s on the organization’s

adaptations to environmental adaptations to environmental

changes.changes.

TaskTask(behavior to complete the job to meet

organizational objectives)

StructureStructure(the way the firm is organized to meet

its mission and objectives)

TechnologyTechnology(the machines and process used to

get the task done)

PeoplePeople(employees who complete the tasks)

Types of Changes

Forces for Organizational Change

External Environmental Forces

Increased global

competition

Consumer demands

Government laws

Economic conditions

Technological advances

Internal Environmental Forces

Financial positionNew and revised mission

and strategyReorganization of formal

structureAcquisition and merger

Stages in the Change Process

1. Denial

2. Resistance4. Commitment

3. Exploration

Resistance to Change

Resistance to change involves the variables of intensity, source, and focus, and explains why people are reluctant to change.

Reasons for resisting change:Status QuoUncertaintyLearning AnxietyFear

Managers should anticipate how employees will react to or resist change

Overcoming Resistance to Change

Develop a positive climate for change

Encourage interest in improvement

PlanGive factsClearly state why the

change is needed and how it will affect employees

Create a win-win situationProvide supportStay calmAvoid direct confrontationUse power and ethical

politics

Change Models

Lewin’s Change Model

Step 1. Unfreezing

Step 2. Moving

Step 3. Refreezing

Lussier’s Change Model

Step 1. Define the change

Step 2. Identify possible resistance to change

Step 3. Plan the change

Step 4. Implement the change

Give the factsInvolve employeesProvide support

Step 5. Control the change

Exhibit 14.5

Organizational Culture

Organizational culture – consists of the shared values and assumptions of how its members will behave

Global firms need to incorporate national cultural values in their organizational culture

Organizational culture is linked with positive organizational results

Although culture can change, it is difficult to change beliefs and values

Slogans Symbols Ceremonies

Heroes Stories

Ways to Learn the Organization’s Culture

Strong and Weak Cultures

Strong cultures –Organizations that have clear values that are

shared to the extent of similar behaviore.g., IBM, PepsiCo, J.C. Penney

Weak cultures –Organizations that have no stated values and do

not enforce behavior

Positive and Negative Cultures

Positive culture –Has norms that contribute to effective

performance and productivity

Negative culture –A source of resistance and turmoil that hinders

effective performance

The most effective The most effective

organizational culture that organizational culture that

leads to effective performance leads to effective performance

is is strongstrong and and positivepositive..

Organizational Climate (1 of 2)

Organizational climate – the relatively enduring quality of the internal environment of the organization perceived by its membersClimate is employees’ perception of the

atmosphere of the internal environmentClimate is based on shared perceptions of the way

things are done

Successful companies tend to have strong cultures and positive climates

Organizational Climate (2 of 2)

Organizational climate is important because:The employees’ perception of the organization serves

as the basis for the development of their attitudes toward it

Their attitudes in turn affect their behavior

Morale – a state of mind based on attitudes and satisfaction with the organizationMorale is an important part of organizational climate

Dimensions of Climate

ResponsibilityResponsibility

RewardsRewards

WarmthWarmth

SupportSupportRiskRisk

StructureStructure

Organizational identity and

loyalty

Organizational identity and

loyaltyDimensions of Climate

Exhibit 14.6

Dimensions of Climate: Summary (1 of 2)

Structure: The degree of constraint on membersThe number of rules, regulations, and procedures

Responsibility: The degree of control over one’s own job

Rewards: The degree of being rewarded for one’s efforts and being punished appropriately

Warmth: The degree of satisfaction with human relations

Dimensions of Climate: Summary (2 of 2)

Support The degree of being helped by others and of experiencing cooperation

Organizational Identity and Loyalty:

The degree to which employees identify with the organization and their loyalty to it

Risk The degree to which risk is encouraged

Training and Development

TrainingThe process of developing

the necessary skills to perform the present job

Typically used to develop technical skills of non-managers

DevelopmentThe process of developing

the ability to perform both present and future jobs

Usually less technicalGenerally designed for

professional and managerial employees

Job Instructional Training

Step 1. Preparation of the trainee

Step 2. Trainer presentation of the job

Step 3. Trainee performance of the job

Step 4. Follow-up

Step 1. Preparation of the trainee

Step 2. Trainer presentation of the job

Step 3. Trainee performance of the job

Step 4. Follow-up

Exhibit 14.7

Performance Appraisal

Ongoing process of evaluating employee job performance

Also called:Performance job evaluationPerformance reviewMerit ratingPerformance audit

One of the manager’s most important and most difficult functions

Conducted properly, Conducted properly,

performance appraisalperformance appraisal can can

decrease absenteeism and decrease absenteeism and

turnover, and increase morale turnover, and increase morale

and productivity.and productivity.

Performance Appraisal Steps

Organization’sstrategy, goals, and

objectives

Organization’sstrategy, goals, and

objectives

State jobresponsibilities

State jobresponsibilities

Conduct informalappraisals – “Coaching”

Conduct informalappraisals – “Coaching”

Develop standardsand measurement

methods

Develop standardsand measurement

methods

Conduct the formalappraisalinterviews

Conduct the formalappraisalinterviews

Prepare the formalappraisalinterviews

Prepare the formalappraisalinterviews

Step 1

Step 2

Step 3

Step 4

Step 5

Exhibit 14.9

Objectives used to appraise employees’ performance:

Developmental ObjectivesUsed as the basis of

decisions that improve future performance

Evaluative ObjectivesUsed as the basis of

administrative decisions that reward or punish for past performancee.g., bonus paye.g., salary decisions

Used to make demotion, termination, transfer, and promotion decisions

RankingManagement by

Objectives(MBO)

Narrative

Rating Scale

BehaviorallyAnchored

Rating Scales(BARS)

CriticalIncidents

Performance Appraisal Methods

Coaching Model

Step 1. Refer to past feedback

Step 2. Describe the current performance

Step 3. Describe the desired performance

Step 4. Get a commitment to change

Step 5. Follow-up

Step 1. Refer to past feedback

Step 2. Describe the current performance

Step 3. Describe the desired performance

Step 4. Get a commitment to change

Step 5. Follow-up

Grid OD

A six-phase program designed to improve management and organizational effectiveness

Phases include:Phase 1. TrainingPhase 2. Team DevelopmentPhase 3. Inter-group DevelopmentPhase 4. Organizational Goal SettingPhase 5. Goal AttainmentPhase 6. Stabilization

Survey Feedback Program Steps (1 of 2)

An OD technique that uses a questionnaire to gather data that are used as the basis for change1. Management and the change agent do preliminary

planning to develop an appropriate survey questionnaire2. The questionnaire is administered to all members of the

organization / unit3. The survey data are analyzed to uncover problem areas

for improvement

Survey Feedback Program Steps (2 of 2)

1. The change agent feeds back the results to management

2. Managers evaluate the feedback and discuss the results with their subordinates

3. Corrective action plans are developed and implemented

Measuring Climate. Commonly used to measure the organizational climate.

Team Building

The OD technique designed to help work groups operate more effectively

The most widely used OD techniqueThe goals of team building programs vary,

depending on:the group’s needsthe change agent’s skills

Team Building: Typical Goals (1 of 2)

To clarify the objectives of the team and responsibilities of each team member

To identify problems preventing the team from accomplishing its objectives

To develop team skills in:problem-solvingdecision-makingobjective-settingplanning

Team Building: Typical Goals (2 of 2)

To determine a preferred style of teamwork and to change that style

To fully utilize the resources of each individual member

To develop open, honest working relationships based on trust and an understanding of group members

ProblemSolving

Training Closure

Process andStructure

Evaluation

ProblemIdentification

ClimateBuilding

Team-Building Program Agenda Topics

The Relationship among Organizational Culture, Climate, and Development (1 of 2)

Climate is a sharing of perceptions and intangibles of the internal environment

Culture is the values and assumptions of the ideal environment

Culture informs climateOften, the concept of culture

encompasses that of climate

The Relationship among Organizational Culture, Climate, and Development (2 of 2)

OD is commonly used as the vehicle to change culture or climate

OD programs tend to be wider in scope than culture or climate

Culture and climate changes can be part of an extensive OD program addressing other issues as well

Global Differences

Openness to change is influenced by:Cultural valuesCollective versus individual societies Openness to power and following orders for change

without questioning authorityCulture and country development

Multinational corporations are continually seeking best practices to implement at all their global facilities